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Tue 6 Jul 2010 03:41 PM

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Saudi Arabia's Jarir expects 15% Q3 net profit growth

Office supplies and electronics retailer sees 'very good sales in both retail and whole sales'.

Saudi Arabia's Jarir expects 15% Q3 net profit growth
(Getty Images - for illustrative purposes only)

Saudi office supplies and electronics retailer Jarir Marketing said on Tuesday it expects third-quarter net profit to rise by 15 percent after posting a 4 percent rise in the second quarter.

"The school season will fall in the third quarter so we expect very good sales in both retail and whole sales.... We expect it to be more than 15 percent," Chief Financial Officer Mohamed Amin said.

The firm also expects "reasonable growth" for its fourth quarter earnings due to promotion activities, Amin told Reuters, declining to be more specific.

Jarir made 75 million riyals ($20 million) in the three months ending June 30 compared to 72 million riyals in the same period a year earlier, according to a bourse statement.

Amin said a gains 2 million riyals from an interest rate swap deal had driven second-quarter profit.

Operating profit declined 5 percent in the second quarter to 75 million riyals from 79 million riyals a year earlier, Jariir said, citing a lower profitability of electronic items and lower sales in foreign branches.

Electronic sales tend to drive the firm's growth but analysts have said that that these products carry lower margins than the other products that Jarir sells, such as books and office supplies.

Earlier this year Jarir said it expected its net profit to increase by at least 15 percent, higher than its profit growth for 2009, as it opens new planned to open new stores. (Reuters)

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